Tax Saving Best 3 categories would be Insurance, Investment and Tax planning. Under Tax savings, There are two kind of investments short term and long term. Investor need to consider his life style and needs before any investment. Majority of the investment are for insurance, child education and pension which are very essential like roti kapda aur makaan.
Short term Investments many not give good yield but save tax for current financial year from Income Tax to be paid.
Short term plans for Tax saving :
- Bank Deposit for 5 years – Post office
- Equity Linked Saving Scheme – Mutual Funds
- National Saving schemes – Post office
- Tuition fee of children
- Unit Linked Insurance Plans – ULIP from Insurance companies
Long term plans for Tax savings:
- Provident Fund
- Life Insurance plans
Where can I invest to save tax?
Tax Saving can be done every month. Plan a budget and start paying from day of your office. Never invest in one instrument to save tax. Spread your investment in many areas to reduce risk and increase returns. Investment pattern differs from age to age. Many times we avoid tax savings because of long term commitment.
Save under best tax saving options and pay your file your income tax papers on time. Saving 100% tax may not possible for anyone in our Country.
Which is the best investment under 80C?
Best investment under 80C would Exemption, Exemption and Exemption. Plan for 100% tax savings while paying and 100% non taxable while getting the fund back. Life Insurance may not give big returns but it can compensate with Insurance cover, Tax benefits and tax free returns.
Other investments like Mutual Funds may give good returns which would help investor to balance on risk.
There are more than 10 to 15 ways to save tax under section 80C of Income Tax Act. As an investor our ideas should be to save maximum tax and get good returns for future. Consider risk appetite, risk capacity and risk tolerance. During investment consider these 3 things before starting.
Insurance is a must, if you had already crossed 80C limit no one is going to ask why investing on same option. Many of us stop investing once section 80C is crossed. Your life style, risk, family and children needs, parents’ expectations should be taken care to the max to safeguard their future.
Best investment under 80C would be enjoying dual tax benefits in one investment. Investment should be get you 80C benefits and reruns should also be non taxable under section 10 (10 D).
Many invest for short term considering funds may require at any time. Divide your investment in 3 or 4 parts and consider ratio according to your needs.
Where can I invest to save tax other than 80C?
The best way to invest is to approach an experienced Advisor for Saving under all options. Sometimes we may not be able to judge ourselves in terms of risk, coverage and other things. A proper planning would help you to avoid many risky investments in the market.
Many investments may returns may be taxable and risky. Requirements differ from person to person. A diversified investment in at least 3 to 4 options of Tax Saving instruments for best returns and any time withdrawals.